Question
From: (redacted)
Sent: Monday, May 19, 2008 6:47 PM
To: Verne, B. Michael
Cc: (redacted)
Subject: HSRInformal Opinion
Mike:
Thanks for takingthe time this afternoon to discuss with us the HSR notification requirements ofa proposed transaction. This will confirm our conversation and the advice yougave us with regard to (1) and (2) below.
Under a proposedmerger agreement between Corporation A (the ultimate parent entity of person"A") and Corporation B (an entity included within person"C"), B will merge with and into A, with A continuing as the survivingcorporation. In the merger, A will issue new shares of its common stock to B'sshareholders, representing approximately 65% of the voting securitiesoutstanding post merger.
C is the ultimateparent entity of B, and as a result of the merger of A and B, it will receivenewly issued shares of common stock of A, representing approximately 52% of thevoting securities outstanding of A post-merger. Therefore, as a result of the transaction,C will acquire control of A, the surviving corporation.
(1) You agreed withus that, given that the merger of A and B and the acquisition of votingsecurities of A by C occur simultaneously, they should be viewed as a singleacquisition in which C acquires approximately 52% of the outstanding votingsecurities of A. Therefore, C is the only acquiring person in the transaction.
Upon consummationof the merger, A, the surviving corporation, will hold the assets that it heldpre-merger as well as the assets of B.
A is a SpecialPurpose Acquisition Company, i.e., a newly formed blank check companythat went public a few months ago and raised cash for the purpose of effectinga business combination with an operating business. A currently holds only cash,and cash is considered to be exempt assets pursuant to 801.21.
Given that C is B'sultimate parent entity, C and B are currently the same person by reason of801.1 (b)(1). Therefore, the acquisition of B's assets by C is exemptfrom the requirement of the HSR Act under 802.30.
(2) In ourconversation, you advised us that the acquisition of voting securities of A byC is exempt under 802.4 as the newly acquired assets of A will consist ofassets (i.e., cash) whose acquisition is exempt from the requirements ofthe HSR Act.